ASX down 1.11% at noon: Chinese investors dump US bonds

Market Reports

by Peter Milios

In August, Chinese investors recorded their highest selling activity of US bonds and stocks in four years, amounting to $21.2 billion, with a focus on treasuries and equities, as per data from the US Department of the Treasury. Additionally, Japanese investors have also been selling US securities, driven by the weakening yen and the strategy to bolster their currency by selling treasuries for dollars.

At noon, the S&P/ASX 200 is 1.11 per cent lower at 6,904.30.

The SPI futures are pointing to a fall of 64 points.

Best and worst performers

The best-performing sector is Energy, up 0.67 per cent. The worst-performing sector is REITs, down 1.65 per cent.

The best-performing large cap is Evolution Mining (ASX:EVN), trading 1.81 per cent higher at $3.665. It is followed by shares in Santos (ASX:STO) and Northern Star Resources (ASX:NST).

The worst-performing large cap is Meridian Energy (ASX:MEZ), trading 4.73 per cent lower at $4.535. It is followed by shares in Allkem (ASX:AKE) and IGO (ASX:IGO).

Asian news

Asia-Pacific markets were all lower Friday, extending losses from Thursday’s broad sell-off.

This comes as U.S. Federal Reserve Chair Jerome Powell said inflation was still too high and would likely require lower economic growth.

While he noted that recent data showed progress toward slowing prices, Powell also added that monetary policy was not yet too tight.

Asia investors will also assess Japan’s September inflation data, which came in at 3%, the 18th straight month above the BOJ’s 2% target, as well as China’s one-year and five-year loan prime rates.

Japan’s Nikkei 225 fell 0.87% after the inflation reading was released, while the Topix was down 0.61%.

South Korea’s Kospi dropped 1.23%, leading losses in Asia, while the Kosdaq was 1.59% lower.

Futures for Hong Kong’s Hang Seng index stood at 17,294, pointing to a weaker open compared with the HSI’s close of 17,295.89.

Company news

Way2VAT (ASX:W2V) has announced that their operations will be unaffected by the current situation in Israel. The corporate headquarters in Tel Aviv remains open and functioning normally with staff attending, although an optional work from home policy is in place. Shares are trading 10 per cent higher at 1.1 cents.

Liontown Resources Limited (ASX:LTR) announced that it has successfully completed an approximately $365 million Institutional Placement to new and existing investors at A$1.80 per New Share. In response, Liontown’s Managing Director and CEO, Tony Ottaviano, said: “I am immensely proud that this funding has attracted such positive domestic and international investment and equity market support which, in turn, demonstrates a strong vote of confidence in the Kathleen Valley Project and the Liontown team.” Shares are trading 31.36 per cent lower at $1.92.

Chimeric Therapeutics (ASX:CHM) is currently on a trading halt pending an announcement in relation to new data for the Phase 1A CLTX CAR T brain cancer clinical trial. The Company requests that trading in its securities be halted until after the expected announcement is made or until the market opens on Tuesday, 24 October 2023. Shares last traded at 2.8 cents.

Commodities and the dollar

Gold is trading at US$1987.20 an ounce.

Iron ore is 0.8 per cent higher at US$119.35 a tonne.

Iron ore futures are pointing to a 0.5 per cent fall.

One Australian dollar is buying 63.14 US cents.

Peter Milios

Peter Milios is a recent graduate from the University of Technology - majoring in Finance and Accounting. Peter is currently working under equity research analyst Di Brookman for Corporate Connect Research.

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